Two Tipping Points for Inkling Markets and Market Scoring Rule

Two tipping points for Inkling Markets and Robin Hanson‘s Market Scoring Rule (which is used as the design mechanism of this play-money prediction exchange).

#1. Stanford professor Eric Zitzewitz uses Inkling Markets (and thus MSR) for his class.

#2. ABC7-KGO San Francisco launches play-money prediction markets using Inkling Markets (and thus MSR). — abc7.inklingmarkets.com = ABC7 Futures Markets — Will San Francisco Mayor Gavin Newsom be re-elected in November 2007? Yes, it seems —what a shame (the guy slept with his assistant’s wife!!).

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ABC7 (story + video):

a) Note that their mantra is “the wisdom of crowds” —not much the “prediction markets” terminology.

b) Adam Siegel describes Inkling as a “prediction market”, not as a prediction exchange —he didn’t get my memo.

c) Eric Zitzewitz seems to forget that there exists out there polls asking people’s opinion on people’s opinion (“opinion opinion polls” –bizarre naming).

d) Why replicating HSX or InTrade at a smaller scale? That said, the San Francisco Mayor event derivative contract makes sense. What about other local prediction markets that the other big betting exchanges won’t do?

e) Each time a sub-exchange is created, does it reduce the potential liquidity of the mother ship? Would HSX have reached such a giant size if it had splitted liquidity during its expansion? I’m asking this question because I typed “san francisco mayor” (without the quotes, actually) in the Inkling Markets search box, and that yield nothing —so the ABC7 prediction markets are not connected with the rest of the Inkling prediction exchange. No good to have isolated pockets of trading.

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A) Adam Siegel raises the spectre of manipulation at InTrade (a real-money betting exchange). He didn’t get the Hanson memo.

B) As for the opportunities to manipulate play-money prediction markets on local politics, would a solution involve the hiring of a sheriff who would monitor the legitimity of suspicious trades?

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Addendum: Eric Zitzewitz…

It’ll be nice if this experiment works, as it will expose prediction markets to a new audience. Log on and trade if you have time. At current prices, there is a lot of money (or at least Inkles) on the table …